Converting Crypto to Collectibles

While major cryptocurrencies have retreated from their mid-spring peaks, surges in blockchain currencies and non-fungible tokens remain among the standout stories of the investment landscape in 2021.

But human beings still live in the physical world, and major profit-taking has been oriented towards physical goods including real estate, collectible cars, and fine art. Luxury watches, long the darling of major auction houses, have emerged as an alternative asset class for crypto holders looking to diversify. As luxury watch vendors such as The 1916 Company begin to accept direct payment in Bitcoin and Ether, converting crypto to collectibles becomes straightforward.

Scarcity, time-tested brand equity, product longevity, and easy conversion to cash rank among the chief virtues of the top luxury watch brands and models.

Diversify With Watches

Crypto might be king for the most aggressive speculators, but physical assets offer unique advantages such as stability, security, and a track record of strength.

Consider one of the rock star watches of our time: the stainless steel Rolex Daytona. Right now, this watch sells new for $13,150 and rises to nearly $40,000 on secondary markets. Normally, that sort of surge might spark questions about the sustainable appeal of the asset, but the standard steel Daytona’s dominance of collector mindshare dates back almost three decades. I don’t know what Satoshi Nakamoto was doing in the 1990s, but if he was shopping for a steel Rolex Daytona, he would have been waiting months or years at his dealer even then.

The best watches – like the best houses, cars, and collectibles – demonstrate long-term strength.

Stability is another advantage of moving crypto wealth into timepieces. Patrician watchmaker Patek Philippe has dominated auction yields for decades, and its most celebrated products have been marked for greatness almost from inception. While the current market for the Patek Nautilus 5711 might be hot to handle for some, watches like 2008’s short-run 5070P chronograph have been considered blue chip investments from the moment they launched.

The collectible watch market offers crypto enthusiasts opportunities to buy into established winners with decades-long track records to prove it; each can tailor purchases to his own appetite for risk. And a 24-hour online marketplace of collectors and specialist vendors allows a watch investor to convert a watch to cash or vice versa in as little as a day.

Moreover, physical ownership of wristwatches offers a level of security crypto struggles to match. Raids on wallets and exchanges have given cryptocurrency a “wild west” image.

Watches are easier to store securely, insure conventionally, and sufficiently liquid to trade easily. All that, and North Korean hackers have yet to pirate a watch from a bank deposit box.

Physical Assets Are More Fun

Full disclosure: I sell watches. But I also collect them, and I’ve never regretting pulling money out of stocks, bonds, or savings for the pleasure of wearing the good stuff. Life is best lived to the fullest, and that’s hard to do under the Bitcoin enthusiast’s Platonic ideal of holding everything, forever.

But spending crypto on watches doesn’t mean expending value. Compared to vacations, years of restaurant tabs, and disposable pleasures, watches are hard assets that retain value over time and endure for lifetimes if maintained. But unlike gold, stocks, or bonds, watches become part of your memories, the fabric of your life, and your experiences throughout. Even an average luxury watch in the $3,000 range has a projected service life amounting to hundreds of years; pocket watches from the Renaissance remain functional.

True, not even a vintage “A-series” Audemars Piguet Royal Oak will match Bitcoin’s surge since March of 2020. But you’re also not going to take your Bitcoin wallet on a honeymoon tour of Europe; it won’t be present at the birth of your child; you won’t put it on your son’s wrist at his wedding. Watches are a rare asset class that can be both a store of value and a lifelong pleasure.

The Joy of Discovery

Countless investors wish they knew about – and understood – Bitcoin in 2009 or Ether in 2015. For early adopters, that kind of life-changing opportunity is long gone. But the luxury watch market is continuous tale of rising stars. Six years ago, the Patek Philippe 5711 was a watch bought for around $20,000 used; today, good examples sell for six figures.

Turn back the clock to the 1990s, and F.P. Journe was a white-label movement engineer known to only a handful of industry insiders. Today, owners of early (i.e., 2001-2004) F.P. Journe watches can almost name their prices, and brand has become a collector industry unto itself.

Recall the 1980s and realize that as recently as the hair-metal era, “Paul Newman” Rolex Daytonas, military-era Panerai watches, and enamel dial Patek Philippe 2526 automatics were overlooked because collectors of the time were obsessed with pocket watches.

The collectible watch market is an ever-expanding frontier. Artisanal brands like Grönefeld, Kudoke, and De Bethune are vying to become the next Journe. And for the prescient, mainstream watches of the 1990s and 2000s are poised to become tomorrow what watches of the 50s, 60s, and 70s once offered; vintage watch value with headroom to move.

Crypto To Collectibles

Savvy investors diversify. Savvy investors who want to have fun find a way to enjoy the fruits of their success without dissipating value. Luxury watches offer a proven outlet for crypto currency winners to have their cake and eat it, too.